Victoria, for the first time ever, has finally overtaken New South Wales (NSW) as Australia’s strongest economy, according to CommSec’s latest State of the States report.
CommSec (Commonwealth Securities) is Australia’s largest online stockbroking firm operated by the Commonwealth Bank of Australia. Each quarter, it releases its State of the States report, which is an economic performance report of Australia’s states and territories. The report covers eight major economic indicators including population, employment, housing, investment, and construction.
Victoria has never owned the top spot in the report’s nine-year history until now, thanks to strong population growth numbers which have been instrumental in driving construction activity. The state currently ranks first in economic growth, dwelling starts and construction work done. In economic growth, Victoria is ahead at 26.5%, followed by NSW at 25.7% and Northern Territory at 25.6%, while Western Australia remains in the last place by 7.6%.
NSW, long standing at the top spot for economic growth in the last four years, slipped to second place due to declines in a number of housing indicators.
The gap between the two states, however, remains narrow, leading to the possibility of a change in positions over the next 12 months, said CommSec’s chief economist Craig James.
In terms of population growth, Victoria maintains its position as the clear winner, having toppled other states since 2015. Victoria currently holds a population growth rate of a cool 2.3% above the Australian Capital Territory (ACT) at 2.15% and Queensland at 1.67%.
Meanwhile, the Northern Territory has the lowest population growth at 0.23%.
Victoria is poised to remain in the lead for population growth with research predicting that population figures will reach approximately 6.26 million in 2018.
High population growth will continue to drive the broader economy — by fuelling retail spending and housing demand.
Thus, Victoria’s meteoric population growth will continue to spur Melbourne on as it maintains its credentials as Australia’s “most attractive city” due to stronger rental growth supported by tight vacancy.
As it is, Melbourne — Victoria’s capital city — is predicted to have a swell in population due to its huge student population and migration. In 2016, the Australian Bureau of Statistics (ABS) reported Melbourne as having the most epic population growth of any Australian city, making up almost a third of Australia’s population growth. The contrast is quite significant, with 2.4% in Melbourne compared to 1.2% in the rest of Australia.
With the current undersupply of housing, and demand driving prices, it appears that Melbourne will continue to remain, for some time to come, Australia’s Most Attractive City for global property players in the Asia Pac region.
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By Noorasikin Ali